Molson Coors – Market Development

It is a basic rule of marketing that a company must constantly monitor and react the external environment that affects a business. As such, ‘Molson Coors’, the brewers behind the beer ‘Carling’ are well-aware that beer’s market share of the U.K alcholoic drinks market has been reduced by 40% over the last four decades. After reviewing their product portfolio, Molson Coors have decided upon a marketing strategy to implement: that is market development. As a response to cultural change, the firm intends to offer their existing Carling drink to female drinkers, a market hitherto un-tapped by their marketing resources. But is it really this simple?

As part of Molson Coors’s multi-brand strategy, Carling has been targeted the male market through football sponsorship, such as ‘The Carling Cup’ and has achieved high levels of brand-equity among its current target market. However, the female consumer has very different set of values that should be satisfied – thus, the brand needs modification – to deliver value to their customers. To appeal to the female drinker, Molson Coors are undertaking product-line filling, where more items are added to a product range. Namely, ‘Kasteel Cru’ and ‘Kasteel Cru Rosé’ drinks are going to be introduced into the product line. This enables clear differentiation from the male-orientated products that dominate the line; the new champagne yeast-based drinks offer new ideas and values. Thus, by creating a new brand, females should feel more confident about ordering beer on a night out.

Moreover, this new branding strategy is an effective front for an extension strategy – offsetting the decline in sales by extending the maturity stage of a product’s life-cycle. This may mean that Moloson and Coors’s competitors begin to drop out of the market, enabling them to increase their market share due to a competitive advantage. They would hope that the increase in market share, however, is faster than the decrease in market size; this would be the litmus-test to determine the effectiveness of their marketing strategy in the review stage of the marketing cycle.

Despite carrying out a year and half’s worth of research and speaking individually to thousands of women across the U.K, there is an inevitable degree of risk-taking needed with a market development strategy. Not only are Molson Coors targeting a new market, they also creating new brands. Hence, it may be more appropriate to define their strategy as diversification; targeting new customers with new brands. As a result of this, albeit distinct move, the brewers risk spreading their resources too thinly – for instance, can the same marketing team satisfy the needs of two customers? It may be that their marketing efforts conflict one anothers.

Furthermore, supermarkets – a key intermediary in the distribution channel, who have huge negotiating power – are likely to adversely affected by this strategy. Introducing new brands simply increases competition for shelf-space. This could lead to some retailers refusing to stock the new drinks, which would ruin the marketing team’s efforts.

Ultimately, although I stress the importance of responding to external change, I am not impressed by this strategy. I believe Molson Coors have responded incorrectly to the decline in beer sales. This is because consumers’ perceptions of brands is not down to marketing gimmicks, like prentious branding and the like, but their own personal experiences with the brands. And it is the male consumer that has this experience through sports events that has created brand equity in the past. Therefore, they should capitalise on this strength and focus on male drinkers by adapting their products and not their target market. Hence, a market development strategy is needed – not market development.

© Joshua Blatchford author of Manifested Marketing 08/11/2010

 

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